
Copy 1 



The Patentee 

His Own 

Selling Agent and 

Legal Adviser 

Here and 

Abroad 




Published by the Author 

W. HORNUNG, Ph.D. 

Detroit, Mich. 

U. S. A. 



PRICE, ONE DOLLAR 



The Patentee 

His Own 

Selling Agent and 

Legal Adviser 

Here and 

Abroad 



Published by the Author 

W. HORNUNG, Ph.D. 

Detroit, Mich. 

U. S. A. 



Press of Wm. Graham Printing Co. 
Detroit 



LIBRARY of CONGRESS 
Two Copies Heceivea 

NOV 15 J904 

CopynitfU tmry 

CLASS CL XXc. No: 

/ o o 3 Oo 

COPY B. 



Copyrighted, 1904 

Bv W. HORNUNG, Ph. D. 

Detroit, Mich. 



^ 



% 



Contents 

INTRODUCTION. 

Part A. 

CHAPTER I. 

Definition of patent rights, their protection and 

their relations to the State laws Page 7 

CHAPTER II. 

Characteristic features of the various modes of 

transferring patents Page 11 

CHAPTER III. 
Practical hints on the sale of patents Page 17 

CHAPTER IV. 

Illustration and criticism of the different methods, 
and what to observe when making assignments 
and contracts, with an appendix of general 
forms of assignments Page 31 

CHAPTER V. 

Organizing and incorporating stock companies and 

their capitalization with reference to patents. .Page 32 

CHAPTER VI. 

Infringement of patents and judicial procedure in 

infringement cases Page 36 

Part B. 

chapter i. 

The taking out and peculiarities of Foreign 
Patents, and the International convention for 
the protection of industrial property.... Page 43 

CHAPTER II. 
Compendium of Foreign Patent laws Page 49 



INTRODUCTION. 

In the following treatise it is proposed to discuss 
the subjects which are usually encountered by those 
who after having secured a patent want to bring 
their newly-acquired privilege on a paying basis. 

In this endeavor they are confronted by various 
questions which besides an idea of business deal- 
ings require a general knowledge of the law and 
fundamental decisions relating to patents and the 
practice of handling them. Points of interest bear- 
ing on foreign patents must also be known to some 
extent. 

Special regard will be paid to United States 
patents, but the general principles of the patent laws 
being the same in Canada and England, the infor- 
mation and hints given here might well be applied 
to either of those countries. 

The author, not intending to make the patentee 
his own lawyer, hopes that the reader will acquire 
such knowledge of dealings in patent matters as to 
arrive at a sober and unprejudiced estimate on the 
various points in question. 



Part A 



CHAPTER I. 

Definition of patent rights, their protection and their relations 
to the State laws. 

A patent is an exclusive property right/ subject 
to the general law of the land, and confers by power 
of Congress a territorial monopoly tO' profit from it 
within the period for which letters patent are 
granted, becoming public property with the expira- 
tion of such time. The patent privileges the owner 
to all known and unknown uses to which his in- 
vention can clearly be applied, no matter whether 
he had conceived the idea of the use or not. 

As well as property is entitled to protection a 
patent right enjoys the same. In some countries, 
like Germany, Mexico, Brazil, Argentine Repub- 
lic, Chili and others, the violation of a patent right 
has even been made an offence punishable by con- 
siderable fine, while in the United States, Canada, 
and England an infringement is subject to civil pro- 
ceedings.2 

In order to sufficiently notify the public, it is de- 
clared to be the duty of the patentee to mark^ the 
patented thing "patented" together with the day and 



^In countries with compulsory license and working it can scarcely 
be called an exclusive property right. 

='The French patent law has taken very energetic measures in the 
provisional confiscation of the infringing articles. 

'In France "brevete" or "brevet" and S. G. D. G. (sans garantie du 
gouvernment) ; in Germany it is customary to mark the words D. R. P. 
(Deutsches Reichspatent) or patent. 



8 

year the patent was granted, and this marking can 
be continued^ after the expiration of the patent. 

Where any unpatented article is marked "patent," 
"patented," "letters patent" or any word of like 
import, with the intent of counterfeiting or imitating 
the stamp of the patentee, for the purpose of deceiv- 
ing the public and inducing them to believe that the 
thing in question was patented, the guilty person 
will be liable, for every such offence, to a penalty^ 
of not less than 100 dollars; one-half of said fine 
goes to the person who is suing for the same, and 
the other to the use of the United States. 

Patent rights do not, like other incorporeal rights, 
vest in a receiver; they cannot be seized and sold on 
execution, nor can a patentee be forced by his credi- 
tor to assign to him an interest in the patent, but a 
judgment at law may order the sale and satisfy the 
legal debts. 

As the assignment can only be made by the actual 
owner, the court will require the patentee to make 
the assignment, and in default of such assignment 
within a limited time, will appoint a trustee, with 
authority to execute the same. 

Whenever a patent is inoperative or invalid, by 
reason of a defective or insufficient specification, or 
by reason of the patentee claiming as his own inven- 
tion or discovery more than he had a right to claim 
as new, the Commissioner can cause a new patent 
for the same invention in accordance with the cor- 
rected specification. The patentee is not entitled to 
have his patent reissued, unless he shows by satis- 
factory evidence, that the error he seeks to have cor- 

iNot so in France where the patentee is liable to a fine if he uses 
the mark after the patent has expired. 

^In Canada a fine of $300, England $25, Germany $250 can be 
imposed. 



rected, was owing to inadvertence, accident or mis- 
take; it also must be stated particularly wherein 
same consisted. Enlarged claim must be sought 
within five years, and other applications for reissue 
within a reasonable time after the grant of the 
patent. 

As a patent right is not property within the state, 
no state in the union has any authority to limit or 
restrict the national privilege of a patent, and 
patent rights cannot be made subject to state taxa- 
tion. But, as the congressional authority does not 
take from the state any portion of its general power 
of police, these rights, conferred by the Federal 
Government, must clearly be distinguished from the 
police powers of the different States. A State has 
the power to place a license tax upon patented 
goods, provided other merchandise is taxed as well; 
this, not being a tax upon the patent itself, does not 
in any way interfere with a patentee's exclusive 
rights which enjoy the protection of the patent law. 

A city can issue an ordinance requiring a license 
to sell patented articles and prescribing a tax upon 
peddlers selling them; as long as such police regu- 
lation makes no difference between this or any other 
salable commodity and the way in which they come 
into existence, there is no encroachment upon the 
privilege of the patent. 

A patentee must observe the Sunday law as much 
as any other vendor; he must show his letters- 
patent if it is required to prove the genuineness of 
an article being patented ; he must put his contracts 
in writing under the same circumstances which re- 
quire writings of others, and he must obey all other 



10 

regulations of police which are made for general 
observance. 

Goods, patented or not, and manufactured in any 
State, can freely be brought into an other State of 
the Union, and any State undertaking to tax them, 
violates the constitutional provision vesting all com- 
mercial control into the Federal Government; such 
tax will therefore be invalid. 

State courts are empowered to pass judgment 
upon all questions of title to patents, but they have 
no judicial authority as to infringement cases. 

The final fee for a patent must be paid not later 
than six months from the time the application was 
passed and allowed; the Patent Office has no au- 
thority to extend said period or to accept such fee 
after the expiration thereof; the excuse which may 
be given for the delay is of no consequence. In case 
of non-payment, the application is forfeited and the 
patent will be withheld, but any person, whether 
inventor or assignee, who has an interest in such 
patent, may file a renewal of the application within 
two years. 

If any patent is destroyed or lost, a certified copy 
can be issued in lieu thereof. 

When a person owning a patent dies, the right 
vests in his heirs. 



CHAPTER II. 

Characteristic feature of the various modes of transferring 
patents. 

Patents or any interest therein are assignable^ in 
law; and the patentee may grant and convey an 
exclusive right under the patent to the whole or 
any specified part of the territory. 

Interests in patents can be vested^ in assignees, 
in grantees of exclusive sectional rights, in mort- 
gagees, and in licensees. 

Assignment. — An assignee is a transferee of 
the whole interest of the original patent or of an un- 
divided part of such whole interest, extending to 
every portion of the United States. 

A patentee selling out all his rights — outright — 
under a patent assigns his entire interest to the full 
end of the term, giving up the proprietorship of the 
patent in the same manner as a person would sell a 
horse. 

When he sells an undivided part, he assigns and 
transfers a part of the whole right, such as one- 
fourth or one-half, to be held by the purchaser for 
his own use to the full term and extent for which 
letters patent are granted. By assigning an undi- 
vided interest, the patentee is losing control of his 
patent as the assignee holds and enjoys that respec- 
tive part assigned to him as fully and entirely as 
the same would have been held and enjoyed by the 
patentee had the assignment and sale not been made. 

^Separate claims of a patent are not assignable. 
^See Chapter IV. 



12 

It gives each one of the assignees the right to prac- 
tice the object without accounting, and each one 
may convey his share without referring to the other 
or others. 

In case the patentee assigns his right, title and 
interest but retains for himself the exclusive right 
to employ the invention in the manufacture of a 
certain class of articles, such assignment is to be 
construed to be nothing more than a license, as an 
assignment in the meaning of the law requires the 
conveyance of the entire monopoly or an undivided 
part thereof. An assignment however conveying 
the exclusive right to make and sell ought to carry 
with it the right to use, and be regarded as a full 
assignment. 

Assignments, made conditional on the perform- 
ance of certain stipulations, as the payment of 
money, if recorded in the Patent Office, are re- 
garded as absolute transfers, because the office has 
no means for convincing itself whether or not such 
conditions have been fulfilled, and has no power 
for proper abjudication. Such assignments can only 
be cancelled with the written consent of the par- 
ties to the conveyance. 

Grant. — While an assignment, as heretofore ex- 
plained, conveys the entire interest or an undivided 
part thereof for the whole territory for which letters- 
patent are granted, a grant transfers an exclusive 
interest for a specified part of the whole territorial 
extent. 

A grantee acquires by the grant the exclu- 
sive right, under the patent, to make, use and vend, 
and to grant to others the right to make, use and 
vend, the thing patented within and throughout 



13 

some specified section, excluding the patentee there- 
from. The patentee sells, assigns and transfers all 
the right, title, and interest for, to and in a certain 
part but not elsewhere; the same to be held and 
enjoyed by the grantee for his own and sole use for 
the full end of the term. 

Territorial grants can be made in any number 
and for any portion of the whole territory, so that 
the patentee can form state, county, farm and town 
rights or rights for any part thereof; a shop right, 
however, is held to be a mere personal license. 

A territorial grantee cannot be restrained from 
advertising and selling within his territory, even 
though the purchasers may take the patented article 
outside of the vendor's territory; the purchaser of 
such article becomes possessed of an absolute prop- 
erty in such goods unrestricted in use, time and 
place. 

Mortgage. — A mortgage by a patentee means 
and is substantially the same as a mortgage of land 
or any other personal property, i. e., a security of a 
debt or the performance of a certain obligation. 
Such mortgage vests in the mortgagee the whole 
title to the patent rights, and its transfer can be 
extinguished and the title revested in the grantor 
by payment of the mortgage indebtedness when due, 
so that, if the indebtedness is truly paid, according 
to the covenants, then the assignment is null and 
void. 

The recording of a mortgage in the Patent Office 
is equivalent to a delivery of possession and makes 
the title of the mortgagee complete toward all other 
persons, as well as against the mortgagor; and the 
mortgagee is the only person who can thereafter 



14 

sue for an infringement of the patent by third per- 
sons. 

Mortgages of patents are generally regarded as 
assignments and can only be cancelled by both par- 
ties. 

Assignments/ grants and mortgages of patents 
must be written or printed and be duly signed; 
they must be recorded in the Patent Office within 
three months from the date of their execution and 
will be void as against any subsequent purchaser 
or mortgagee unless such notice is given in due 
time. 

Purchasers and mortgagees, to be sure that the 
letters patent is free from all prior grant, mortgage 
or other incumbrance, should therefore investigate, 
if assignments are already granted, and should care- 
fully keep the term prescribed by law in order to 
be protected against possible future claims. 

The patentee, in granting a license, retains some 
right and certain interest, so that the licensee, con- 
trary to the assignee and grantee, is not independent 
in his rights conferred upon him by a license. 

Although an assignment is not recorded within 
the above mentioned period, it is binding on the 
assignor, and he can not sell it again. An oral 
agreement for the sale and assignment of a patent 
right does not answer the requirements of the 
patent law; however, a decision of the Supreme 
Court of the United States says, that such agree- 
ment may be specifically enforced in equity upon 
sufficient proof thereof. Neither a mortgage, nor a 

^Inventors who intend to have their patents issued to an assignee, 
must record such assignments in the Patent Office at a date not later 
than the day on which the fina'l fee is paid. 



15 

grant, nor an assignment require sealing, witness- 
ing, or acknowledgment. 

Licenses. — After having given a general out- 
line of assignments, grants and mortgages, we will 
now take up the last mode of conveyance, the license 
and royalty plan, which permits of a great many 
different ways. 

A licensee takes an interest less than or different 
from either of the other transferees. 

By "royalty" is meant a designated constant 
license fee payable for the privilege of manufactur- 
ing or selling a protected article. The words "roy- 
alty" and "license" are frequently used to indicate 
the same. 

An "exclusive" license is one that gives the 
licensee the sole right to work the invention, pre- 
vents its use by the assignor and restrains him from 
granting other licenses to any one else; it can be 
exclusive in regard tO: manufacture, sale and use or 
either of these rights, and also exclusive within the 
entire territory or any part thereof. A licensee is 
not the owner of an interest in the patent, but he 
has by contract acquired a right to make, or use, 
or sell the patented device. Such right given in a 
license for a term of years, will terminate upon 
death of the licensee within the period, unless the 
contract extends the right to executors. 

The rights to make, use, or sell are completely 
severable rights, and the owner of a patent may 
confer such qualified privilege as he sees fit, whether 
within specified limits, or under limitations of quan- 
tity, or members, or restricted use. He therefore 
may grant with or without certain restrictions the 
right to make and use, and not to sell; or to make 



16 

and sell, and not to use;^ or to use and sell, but not 
to make; or he may convey the right to make, use 
and sell but either or all of these rights limited. 

A license to manufacture or use patented articles 
at a certain place, is a personal license; it is not 
transferable, and if given for use or make under the 
clause "at own establishments" does not authorize 
to profit from it at works occupied by the licensee 
and others. 

When a license is granted to a partnership con- 
cern which is afterwards dissolved and the business 
continued by one of the partners, the latter has the 
claim to the license. 

While the law requires that assignments and 
grants must be written, a license may be oral,^ writ- 
ten or printed, and if written or printed, must be 
duly signed. A written license has the advantage 
that it can usually be proved with more certainty. 

When an inventor, in consideration of assistance 
given him, verbally agrees to give an interest in the 
manufacture of his invention, but does not make 
an assignment of such interest in legal form by fil- 
ing it for record in the Patent Office, and when he 
subsequently makes an assignment of the patent to 
another party, without notice of the previous verbal 
interest, the verbal license has no effect as against 
the subsequent assignee, and a title conveyed by 
such assignment would be perfect. 

If not provided in the contract, a licensee cannot 
subdivide or transfer his license without the paten- 
tee's consent, as the former is not the owner of an 



^The right to make and sell entitles generally also to the use. 
*In Canada and England a license must be written. 



17 

interest in the patent; he also has no authority to 
sue infringers in his own name. His right, how- 
ever, is protected against forfeiture, should he not 
comply with the covenants of the contract in regard 
to the payment of royalties^ or otherwise; conse- 
quently a decree of a court will be necessary for the 
declaration of said forfeiture, unless the terms of 
the license expressly give the licensor power of 
revocation. 

A bill of complaint to recover royalties reserved 
in a transfer of patents and alleged to be wrong- 
fully withheld, does not prevent a case arising un- 
der the jurisdiction of the United States courts as 
long as it is only a suit upon the contract to recover 
royalties and not a suit upon the right, title, or in- 
terest under the patent laws. Mere breaches of con- 
tracts which do not authorize a forfeiture are gen- 
erally to be decided by the State courts. 



CHAPTER III. 
Practical hints on the sale of patents. 

It means a considerable profit to sell patents with- 
out middlemen; it also is a fact that the manufac- 
turers prefer to deal with the patentee directly; 
moreover they use to consider it lack of confidence 
on the part of the patentee, when a patent is offered 
to them through an agent, as no one better than the 
inventor is in the position to demonstrate the con- 
struction and operation of his invention, and to set 

*A claim for royalties is not a lien on the articles manufactured. 



18 

forth its merits and advantages he claims. There 
can be no doubt, the patentee himself is the best and 
most economical selling agent and it is to be warned 
against unscrupulous people who offer their help in 
the conducting of the sale, without having the 
slightest personal influence or any other facilities 
to fulfill what they claim often in swindling schemes. 

They generally ask for a certain payment in ad- 
vance alleging, that some money will be necessary 
for creating competition, for corresponding and for 
pushing the sale by means of advertising with the 
object of finding a purchaser, or they will try to 
bind the patentee by his signing an enclosed well 
worded contract, looking like an official document, 
fixed up in the best of style. 

There are some attorneys and solicitors of 
patents combining the business of soliciting with 
that of selling patents. Doubtless it may be and 
is done honestly with good profit to the inventor, 
and many times, by this method, inventors and in- 
vestors are brought together to their mutual advan- 
tage; but propositions for undertaking the sale of 
inventions which require the payment of a cash 
fee in advance are as a rule justly condemned. Any 
firm of standing with experience in selling patents 
has in the writer's opinion no reason to require an 
advance fee; in accepting an order they ought to 
be convinced by all means to turn the patent into 
money, if not at the price anticipated, so at a smaller 
amount from which they can deduct their commis- 
sion. In dealing with a patent selling firm the in- 
ventor might do well to fix a minimum price and a 
certain time within which the sale has to be accom- 
plished, in case of failure thereof the inventor hav- 



19 

ing free play to cancel the order. It might also be 
arranged that the commission is payable on the day 
the sale is closed and the purchase money paid. 

To successfully negotiate the sale of patents re- 
quires a certain knowledge of practical business 
methods through which to reach interested parties, 
capitalists and manufacturers. Though a great 
many inventors are not accustomed to business deal- 
ings, they might nevertheless well succeed in dis- 
posing of their patents by themselves, if they facili- 
tate the negotiations by means of some good printed 
matter presenting the invention in illustration and 
description and setting forth its merits and com- 
mercial value. Another way to make an invention 
publicly known is by advertising in newspapers^ 
with large circulations or in trade journals;^ a fa- 
vorable critical discussion therein will be of great 
value. 

Of less value might be those papers which are ex- 
clusively devoted to the sale of patents in general, 
as people who intend to invest in patents are usually 
interested in only one line of trade and its connect- 
ing branches, and will therefore not look for papers 
which bring all kinds of patents mixed together. 

iNew York Herald, Philadelphia Times, Boston Herald, Pittsburg 
Dispatch, Buffalo Courier, Cleveland Leader, Detroit Free Press, Chi- 
cago Tribune, Milwaukee Sentinel, Cincinnati Enquirer, Louisville 
Courier- Journal, St. Louis Republican, New Orleans Times, Kansas 
City Journal, Denver Rocky Mountain News, St. Paul Pioneer-Press, 
Seattle Post-Intelligencer, San Francisco Chronicle. Canada: Toronto 
Globe, Montreal Gazette. England: London Daily Telegraph, London 
Times. 

'Iron Age, Railroad Gazette, Metal Worker, American Machinist, 
Engineering Record, Iron Trade Review, Engineering and Mining Jour- 
nal, American Engineer and Railroad Journal, Railroad Gazette, Street 
Railway Journal, Power, Electrical Review, Electrical World and 
Engineer, Electrochemical Industry, Scientific American. England: 
Engineering, London; Engineering Magazine, London an4 New York; 
Ironmonger, London. 



20 

If a person is taking such extraordinary interest in 
patents in general, he would certainly prefer to sub- 
scribe for the official publications of the Patent 
Office which the latter will furnish at very reason- 
able price to anyone asking for it. 

In order to give some idea of the form for ad- 
vertising an invention, the following pro-forma ad- 
vertisements are given. The statements should not 
be exaggerated as otherwise the effect might be 
contrary to expectations : 

New Fire Stove. — Gives three times more cook- 
ing and heating, and consuming only a .third of the 
fuel used by other ranges. No smoke; no chimney 
sweep. Will assign one-half share of the patent 
or sell outright or on royalty. Also English and 
German patent rights for disposal. Interested parties 
may address 

Improved Automatic Railway Signal. — A pressing 
want. Applicable in connection with the "block sys- 
tem" as well as generally. Wrecks thwarted. Sure 
to command ready sale. Capitalists or manufacturing 
firms required to finance or take it up. Can be seen 
in working order. For particulars apply to 

Patented Improved Blow-off Valve. — Designed 
for boilers to provide an inexpensive and durable 
device for cleaning boilers, effectively removing mud 
and other sedimentary deposits. Several orders al- 
ready in hand. Patent rights, territorial grants or 
licenses, for disposal and offers invited for same. De- 
scriptive and illustrative circular can be had from 



To Promoters. — Advertiser will be glad to com- 
municate with a firm of promoters who would be 
willing to form a company to work the patent of an 
Automatic Fire Escape. Ready in a second. 50% 
cheaper to manufacture than the best now in use. 
Favorably criticised in trade journals. Working 
model can be seen by appointment with 

Every invention supplying a want is in demand 
and the greater the demand the higher the value, 



21 

and the broader the claims of the letters-patent the 
less the possibility of competition. But in estimat- 
ing the commercial value of a patent, it cannot be 
disregarded that an overhauling by any similar im- 
proved device is by no means excluded. Said cir- 
cumstances will be taken into consideration by the 
investor in patents, and he will calculate which 
profits can be derived in undertaking the manufac- 
ture and sale of the article. This estimated profit 
must stand in a certain proportion to the amount 
to be invested and accordingly an approximate value 
will result from the calculation. 

Before closing a transaction, it will eventually be 
a precautionary measure to send the assignment so 
that the equivalent can be collected on delivery. No 
assignment or grant can be revoked^ on the ground 
of partial failure to pay the price agreed upon. 



CHAPTER IV. 



Illustration and criticism of the different methods^ and what 

to observe when making assignments and contracts, with 

an appendix of general forms of assignments. 

The various methods^" at disposal for handling a 
patent will more or less take up the time of the 
patentee, however, the amount realized in one 
way or the other might also considerably differ. 

Selling a patent outright or complete is the easiest 
and quickest method which will generally be advis- 

^The assignment cannot be stricken from the record, but a second 
document having the effect of nullifying the first one will, if presented, 
be recorded, leaving the effect to be determined by the courts. 

'See Chapter II. 



able for inventions of inferior importance. It 
remunerates the patentee for his inventive genius 
and releases him from all possible failure of his 
patent in the commercial and financial success, leav- 
ing it to the buyer to make the most of it. An 
entire interest in the usual form is often assigned 
before the issue of the patent, but the judicious 
patentee should not assign an undivided interest un- 
conditionally, as the nature of such assignment pro- 
duces very peculiar relations between him and the 
assignee, and if the latter is a man of questionable 
character, complications will be the rule. 

Each of the co-owners in an undivided owner- 
ship is an independent sole owner of one portion 
of the property, and each having as good a right 
as the other, can practise his individual right how 
and where he sees fit, either by using, making or 
selling the patented articles, also by assigning inter- 
ests^ or granting licenses at liberty and at his own 
benefit without consent or accountability to the 
other owners. The latter cannot be compelled to 
join in any action of the other, and they are not 
liable for losses incurred thereby; no power vests in 
a joint owner to control the other, and no recovery 
of damages or profits can be had against a co- 
owner. Licenses given by one have full validity 
just the same as if granted by all, and as long as 
the entire monopoly is not exercised and the separate 
rights of the other owners remain unaffected, the 
co-owners as well as their licensees, in manufactur- 
ing, using or selling specimens of the patent, do not 
appropriate to themselves anything which does not 
belong to them. 

^He cannot increase the original number of assignees. 



23 

Therefore, if it is not the intention to convey such 
privileges described as pecuHar to the joint owner- 
ship, the patentee must add to the assignment an 
express contract forming an inseparable part thereof 
and defining the position and rights of the parties 
to the instrument. Such agreement may set forth, 
that neither shall have any right or power to grant 
licenses or other privileges under or relating to the 
patent, without that all the owners of the letters 
patent join in the same in writing ; that neither shall 
have separately the right to make, use or sell any- 
thing under the patent, and that neither is to be 
accountable for losses made by one of the parties 
on account of any independent action in manufac- 
turing, using or selling; further that proper books 
are to be kept, Which are open to inspection, and 
finally that the profits are to be divided in propor- 
tion to the share. 

All difficulties are so overcome; none of the part- 
ners can deal with the patent separately or dispose 
of any interest therein without the concurrence of 
the others, and each has a direct liability to account 
for profits which may arise from the patent. 

It will generally pay well to divide up the 
monopoly and sell by territorial grants, the approxi- 
mate value of which can be fixed by taking the 
population^ of the different sections as a basis. 
There are undoubtedly always manufacturers in the 
different territories who would undertake to buy an 
exclusive right for the state or county in which they 
live but would not venture the risk of investing in 
— - 'k 

^statistic statements of states, counties, incorporated cities, towns 
and villages of the U. S. are given in Rand, McNally's "Pocket Atlas 
of the World" or in the yearly almanac, "The World." 



24 

an entire interest; those applicants owing to their 
thorough knowledge of the commercial possibility 
of the patent in their section are in the position to 
value the invention accordingly and pay a better 
price than other people possibly can. 

When the inventor has succeeded to place his 
patent in one territory further transactions may soon 
follow, the quicker the more important from a finan- 
cial point of view that portion was which he has 
disposed of. Having thus turned a part of his 
monopoly into money, he may now profit from the 
experience of his grantees and perhaps conclude to 
grant further territorial rights with the restriction 
to usQ and sell only, the inventor supplying the 
patented article either by manufacturing it himself 
or by making an agreement with a manufacturing 
firm to cover the demand for the goods at stipulated 
prices. 

Granting licenses with the privilege to sell 
throughout the monopolized territory will in many 
cases prove less lucrative to the patentee; it takes 
from him the opportunity" of granting exclusive ter- 
ritorial rights for which there are generally a good 
many interested parties, and it will be more difficult 
to interest further manufacturers when competition 
can meet the sale everywhere, 

A license combined with the royalty plan will al- 
ways be advisable, if the invention is undoubtedly a 
meritorious and promising one. The licensor is 
hereby profiting in proportion to the commercial 
success of his patent to the end of the term of the 
monopoly, during which time he will have a continu- 
ous and very likely increasing revenue. 



25 

In such contract the Hcensee agrees to pay the in- 
ventor a certain license fee "royalty" upon every 
article manufactured or sold. 

The contract may further provide that the right 
and privilege is given for personal exercise, and that 
the license therefore is not transferable; that there 
will be no expenses whatever for the patentee ; that a 
certain minimum amount as royalty, irrespective 
whether the same was secured from the sales or 
not, yearly is guaranteed by the manufacturer who 
has to use due diligence^ in manufacturing and 
selling; that the licensee agrees to make (monthly, 
quarterly or semi-annual) full and true returns (un- 
der oath), and to keep proper books of account to 
contain entries of each article manufactured or sold, 
the patentee having access to the books when de- 
sired ; some license contracts provide a discount from 
the fee agreed upon for prompt payment of the 
royalties. It is finally to be agreed that upon failure 
to make returns or payments of license fees, the 
patentee can terminate the license by giving writ- 
ten notice, but without discharging the licensee from 
any liability to comply with the covenants of the 
license in all its details. 

By making assignments of patents in foreign 
countries the following extra provisions will be ad- 
visable : That the assignee covenants to pay all fees 
and taxes^ in due time, and observe all other regu- 
lations of the government, and in the event of his 
causing to lapse the patent by reason of non-pay- 

H. e. that good material and workmanship will be employed; that 
the articles are marked "patented," and that every'thing will be ob- 
served to maintain a good reputation for the invention. 

Hti France the taxes are to be paid before an assignment can be 
recorded. 



ment of taxes, non-working, importation or other- 
wise, he forfeits damages to a certain amount; the 
assignee shall further agree to prosecute, on his 
cost, persons infringing the invention. 

The royalty is to be based upon the probable 
profit on each article and 15 to 30 per cent, thereof 
can be considered a reasonable demand. 

Regarding the selling price of a patent, it may 
be said that the value depends upon the success the 
patented article promises to have in the vast com- 
mercial and industrial field; a proper judgment of 
the value can only be expected from a person who 
knows the invented article thoroughly in its trade, 
merits and manufacture which might allow him to 
anticipate the probable market it will find. 

If the patentee himself is not sufficiently ac- 
quainted with the trade to which his invention ap- 
pertains, he might interest someone of executive 
ability by granting him a small license; he so makes 
a start and gains the services of an experienced man 
who, in working for himself, will pave the way 
for the licensor's future success. 

No particular form is required for transfers of 
patents and the following general forms may be 
given as guide. 



27 



APPENDIX TO CHAPTER IV. 

GENERAL FORMS OF ASSIGNMENTS.* 

1. Assignment of the Entire Interest in letters 
patent. 

Whereas, I, , of , 

county of , State of , did 

obtain letters patent of the United States for an 

improvement in , which letters patent 

are numbered , and bear date the 

day of , in the year 19 . . ; and whereas 

I am now the sole owner of said patent and of all 

rights under the same ; and whereas , 

of , county of , and State 

of , is desirous of acquiring the 

entire interest in the same: 

Now, therefore, to all whom it may concern, 
be it known that, for and in consideration of the 

sum of dollars to me in hand paid, the 

receipt of which is hereby acknowledged, I the said 

, have sold, assigned, and 

transferred, and by these presents do sell, assign, 

and transfer unto the said , the 

whole right, title, and interest in and to the said 

improvement in and in and to the 

letters patent therefor aforesaid ; the same to be held 

and enjoyed by the said , 

for his own use and behoof, and for the use and 
behoof of his legal representatives, to the full end 
of term for which said letters patent are or may 
be granted, as fully and entirely as the same would 

*As given by the Rules of Practice in the United States Patent 
0£Sce. 



have been held and enjoyed by me had this assign- 
ment and sale not been made. 

In Testimony Hereof, I have hereunto set my 

hand and affixed my seal at , in the 

county of , and State of , 

this day of , 19 . . . 

In presence of 



(L.S.) 

2. Assignment of an Undivided Interest in let- 
ters patent. 

Whereas, I, etc., (as No. 1.) 

Now, Therefore, to all whom it may concern, 
be it known that, for and in consideration of the 

sum of dollars to me in hand paid, the 

receipt of which is hereby acknowledged, I the said 

, have sold, assigned, and 

transferred, and by these presents do sell, assign, 

and transfer unto the said , 

the undivided one-half part of the whole right, title 
and interest in and to the said invention and in and 
to the letters patent therefor aforesaid; the said un- 
divided one-half part to be held and enjoyed, etc. 
(as No. 1). 

3. Grant of Territorial Interest. 

Whereas, I, , of , 

county of , State of , did 

obtain letters patent of the United States for im- 
provement in , which letters patent 

are numbered , and bear date the 

day of , in the year 19 . . ; and whereas 



29 

I am now the sole owner of the said patent and of 
all rights under the same in the below recited terri- 
tory; and whereas ., of 

, county of State 

of , is desirous of acquiring an 

interest in the same: 

Now, Therefore,, to all whom it may concern, 
be it known that, for and in consideration of the 

sum of dollars to me in hand paid, the 

receipt of which is hereby acknowledged, I the said 

, have sold, assigned, and 

transferred, and by these presents do sell, assign, 

and transfer unto the said 

all the right, title and interest in and to the said 
invention, as secured to me by said letters patent, 

for, to, and in the State of , and 

for, to, or in no other place or places; the same to 

be held and enjoyed by the said 

within and throughout the above specified territory, 
but not elsewhere, for his own use and behoof, and 
for the use and behoof of his legal representatives, 
to the full end of the term for which said letters 
patent are or may be granted, as fully and entirely 
as the same would have been held and enjoyed by 
me had this assignment and sale not been made. 

In Testimony Whereof I have hereunto set my 

hand and affixed my seal at , in the 

county of , and State of , 

this day of , 19 . . . 

In presence of 

y^y^y^y.'.''.'''' (l.s.) 



30 

4. Not Exclusive License with Royalty. 

This Agreement, made this day 

of , 19 . . , between , 

of , in the county of , and 

State of , party of the first part, and 

, of , in the county of 

, and State of , party of 

the second part, witnesseth, that whereas letters 

patent of the United States No , for an 

improvement in , were granted to the 

party of the first part on the day of , 

19 . . ; and whereas the party of the second part is 

desirous of manufacturing containing 

said patented improvements: 

Now, Therefore, the parties have agreed as fol- 
lows: 

I. The party of the first part hereby licenses and 
empowers the party of the second part to manu- 
facture, subject to the conditions hereinafter named, 

at their factory in , and in no other place 

or places, to the end of the term for which said let- 
ters patent were granted, con- 
taining the patented improvements, and to sell the 
same within the United States. 

II. The party of the second part agrees to make 
full and true returns to the party of the first part, 

under oath, upon the first days of and 

in each year, of all con- 
taining the patented improvements manufactured by 
them. 

III. The party of the second part agrees to pay 

to the party of the first part dollars as a 

license fee upon every manufactured 



31 

by said party of the second part containing the 
patented improvements; provided, that if the said 
fee be paid upon the days provided herein for semi- 
annual returns, or within days there- 
after, a discount of per cent shall be made 

from said fee for prompt payment. 

IV. Upon a failure of the party of the second 
part to make returns or to make payments of license 

fees, as herein provided, for days after the 

days herein named, the party of the first part may 
terminate this license by serving a written notice 
upon the party of the second part; but the party of 
the second part shall not thereby be discharged from 
any liability to the party of the first part for any 
license fees due at the time of the service of said 
notice. 

In Witness Whereof the parties above named 
have hereunto set their hands the day and year first 

above written at , in the county of 

and State of 

In the presence of 



5. Shop-Right License. 

In Consideration of the sum of dol- 
lars, to be paid by the firm of , 

of , in the county of ,1 

do hereby license and empower the said 

to manufacture in said (or other place 

agreed upon) the improvement in , for 

which letters patent of the United States No 

were granted to me the day of , 

in the year 19 . . , and to sell the machines so manu- 



32 

factured throughout the United States to the full 
end of the term for which said letters patent are 
granted. 

Signed at , in the county of 

and State of , this day of 

19... 

In presence of 



CHAPTER V. 



Organising and incorporating of stock companies and their 
capitalization with reference to patents. 

Valuable inventions are not seldom handled in 
organizing stock companies which manipulation af- 
fords to finance patents upon co-operative principles 
which have brought up to success many financiers 
of this country. The advantages of co-operation are 
increased facilities and saving power, restriction of 
the risks from bad management, errors of judgment 
or dishonesty of partners, limitation of individual 
liability and the support of every one owning a share 
of the stock. 

This method of disposing of patent rights will 
attract investors who would like to participate in 
the enterprise without personal obligation and with 
a proportional small amount of capital, beyond 
which they do not run any risk as they would by 
entering into a business as partner; also people 
would be interested who want to secure a position 



33 

as vice-president, treasurer, or secretary through in- 
vestment. 

The patentee could carry out the incorporating 
procedure by himself with the aid of a few persons 
who are willing to subscribe for some shares and act 
as incorporators; or he might communicate with a 
promotor who will finance the company and attend 
to every detail of the organization. 

As the corporation law greatly differs in the 
various states, it is first of all necessary to determine 
under which state the company shall be incorpor- 
ated, and hereby are to investigate the legal require- 
ments in regard to the following points : 

1. Amount of capital to be paid in. Some states 
require the full amount of capital stock to be actu- 
ally paid in, in cash or cash value, others, so New 
Jersey, the home of the trusts, permit the incorpora- 
tors to value its "property" and "services rendered" 
ad libitum, which usually results in watering "over 
value" of the stock. 

2. Liability of stockholders. The stockholder 
is generally only liable for debts to the full value 
of his stock; if he has not yet paid in said amount 
in full, he can in case of insolvency of the corpora- 
tion be held for the balance. Some states do not 
allow to issue stock under par. 

. 3. Location of office. There are corporation 
laws requiring the main office within its sphere, ac- 
cording to others the business may be carried on, 
also the meetings of the stockholders be held any- 
where outside of the state where the charter is se- 
cured. Most of the states, however, require to 
maintain a branch office within their territory, but 
this is very often only a nominal condition which 



34 

easily can be complied with; the same can be said 
regarding regulations which demand that some of 
the incorporators are residents of that state. 

Further important questions are the power to 
adopt by-laws ; if the charter is perpetual or limited ; 
if annual and detailed reports are required; and if 
new capital can be introduced without applying for 
a new chapter. 

The expenses^ for incorporating differ also in the 
states; organization and other fees and annual taxes 
are imposed varying with the amount of capital 
stock. 

Favorable corporation laws are in New Jersey, 
West Virginia, Delaware, Arizona, South Dakota 
and District of Columbia, The corporation law of 
the United States in the District of Columbia has 
recently been provided by Congress and the author 
might be inclined to recommend the incorporation 
there, as the fact that Congress itself issues the 
charter could be of advantage to the prestige of the 
company; there are no annual taxes required. 

In making application for a charter, it must be 
specified the corporate title and purposes of the cor- 
poration, place of business, amount of capital stock 
and number of shares of common and preferred 
stock, names of incorporators, directors and officers; 
3 or 5 of them must sign the application. 

The first incorporators are legally authorized to 
do duties as board of directors, and their actions 
are lawful and binding until the first general meet- 
ing of the stockholders; they can elect the persons 

1 N. J. W. v. Del. Ariz. S. D. D. C. 
Capital stock, $25,000.00. 

Organization and filing fee... $35.00 $35.00 $35.00 $10.00 $10.00 $ 8.00 

Annual taxes 25.00 20.00 12.50 none none none 



35 

for the officers of the new company and can de- 
termine by majority the cash exchange for the as- 
signment of the patent or, should the patentee want 
to stay in the business, the amount of shares be- 
longing to him ; the latter are considered fully paid 
and non-assessable and are subscribed as given in 
property. 

The right to control the actions of the company is 
vested in the majority, so that the inventor who 
holds alone or with his friends the bulk of the shares, 
has secured a controlling interest, for instance with 
251 by 500 shares. 

After having settled the question of the equivalent 
for the patent, say 40 to 50 per cent, of stock value, 
the commission of the promoter will be paid with 
5 to 15 per cent to be subscribed as services ren- 
dered, then the remainder of the capital stock will 
go to the treasury stock which is to be turned into 
cash by selling the shares in order to make working 
capital. 

The proposed plan of the organization is brought 
before the public with an invitation to subscribe for 
the shares. The stock may be divided into any num- 
ber of shares, made of any value, a portion thereof 
can form a preferred stock at an agreed rate of in- 
terest to be paid out of the profits before any divi- 
dends are payable on the common stock. 

When the subscription is completed, a meeting 
of the stockholders will be called in, to elect the 
board of directors and to conclude upon all business 
affairs which have been left by the original incor- 
porators for consideration in the general assembly. 

If the patentee should later find it convenient to 
dispose of his shares, he could do that by and 



36 

by and, taking opportunity of the fluctuation, sell 
them at an agio. It must be borne in mind that it 
will always bring confidence to outsiders and create 
credit when the inventor himself remains interested. 



CHAPTER VI. 



Infringement of patents and judicial procedure in infringe- 
ment cases. 

Every patented device is exposed to danger of 
being infringed. An infringement is defined as con- 
sisting in the manufacture, use or sale of something 
already claimed in a patent, and each claim will 
eventually be dealt with by itself. Only claims can 
be infringed, not anything which is described in the 
specification without being claimed. The almost 
stereotypical expression, "substantially as de- 
scribed," is immaterial and unnecessary as every- 
thing must be clearly and definitely stated in the 
claim. 

Infringement is not avoided by immaterial varia- 
tion and change of forms or dimensions, substitu- 
tion of mechanical equivalents or of one material 
for another, adding of anything which is super- 
fluous, etc. It will generally be considered an in- 
fringement, when a study is made to avoid the literal 
definition of the claims without establishing a sub- 
stantial difference. The omission of a part, the 
presence or absence of which does not essentially 
affect the mode of function and operation, is of no 
significance, and in order to avoid infringement, an 



37 

important element must be dropped out; in Eng- 
land even this is not sufficient. 

The actual use or sale of a patented device is not 
a necessary condition to arise the question of in- 
fringement; the mere making with the intention to 
use or sell is already unlawful. 

A person whose license is forfeited is an in- 
fringer, when he continues to work the patent; the 
owner of a territorial interest commits infringement, 
in making contracts to deliver patented goods in a 
territory for which another owns an exclusive right ; 
his only way to dispose of goods outside of his dis- 
trict is by selling in the ordinary course of trade and 
business. A co-owner of an invention, finding it 
profitable to use an infringing device, becomes an 
infringer and is liable for damages in proportion 
to the relative interest the other co-owner has in the 
patent. 

A patentee, supposing an infringement has oc- 
curred, can bona-fide warn against it by explaining 
his rights to the respective party, and by giving no- 
tice of his intention to sue, should the violation 
not be stopped. When the warning is disregarded, 
he can sue the infringer for damages or apply to a 
court of equity for an injunction to restrain immedi- 
ately from the continuance of the infringement. 

Suits must not be delayed, say more than three 
months, as a longer delay may constitute laches and 
the injunction be refused; on the other hand, before 
beginning a suit, it must not be omitted to 
thoroughly investigate if the complaint can be sus- 
tained, and this particularly when the alleged in- 
fringer is basing his act upon a similar patent he 



38 

Actual damages for the infringement can be 
brought in any district in which the act is commit- 
ted, provided that the infringer has a regularly 
established place of business there. Upon a decree 
being rendered in a case of infringement, the com- 
plainant is entitled to recover, in addition to the 
profit to be accounted for by the defendant, the dam- 
ages the complainant has sustained thereby. The 
profits consist of the difference between cost and 
yield; where no profits have been derived from the 
use, there can be no decree for profits, and the plain- 
tiff's only remedy is by action at law for damages. 
The court assesses the latter or causes the same to 
be assessed under its direction. 

In measuring the damages, the profits realized by 
the defendant from the unlawful use, or actually 
paid license fees "royalties" are usually taken as 
standard measurement for a just estimate; if the 
license fee is not established by several uniform 
licenses, the gains have to be fixed which the pat- 
entee would have had in case of non-infringement. 

No damages or profits can be recovered for an 
infringement committed more than six years before 
the filing of the bill of complaint. 

As previously set forth the patented article must 
be marked;^ if it is omitted to give such notice of 
the article being patented, no damages^ can be recov- 
ered in an action for infringement, unless it can be 
proven that the infringer knew of the existence of 
the letters patent or that he was notified of his un- 
lawful act, but continued to infringe. Absence of 
intent to infringe is no excuse for the defendant. 

^In England there is no obligation to mark. 

"In Canada damages can be asked whether the protected manufac- 
turers were marked or not, but there is a penalty for failure to mark. 



39 

A thing which is marked patented as of a date of 
its patent, but of the date of an earlier patent to the 
same patentee, upon which it is an improvement, 
this marking is not properly done and secures to the 
patentee no right to damages on proof of infringe- 
ment of the improvement. 

The plaintiff in an infringement action may be 
the patentee or sole assignee; or any grantee may 
sue alone for infringement within the territory in 
which he owns the entire right, exclusive of the 
patentee himself; also executors and administrators 
are entitled to bring an action. 

Co-owners must bring their actions for infringe- 
ment jointly^, so that the patentee cannot sue with- 
out joining his assignee of an undivided part of the 
patent. The holder of a specified territorial right, 
either as licensee or assignee, is not a necessary 
party complainant to a suit for infringement outside 
his own territory; has the infringement taken place 
within the territory of a grantee of an undivided 
interest, he must join in an action of his grantor 
for infringement. 

A licensee cannot sue infringers in his own name ; 
he must do that in the name of the owner with 
whom the title remains. The only exception where 
the licensee is authorized to prosecute in his own 
name, is, when the patentee himself commits an act 
of infringement, for instance, by violating an exclu- 
sive right of the license to manufacture or sell, in 
making or selling himself. 

Suits for infringement or for an injunction raise 
not merely questions of contract but those under the 

*In England they can sue alone. 



40 

patent laws, and must therefore be brought under 
the jurisdiction of the United States circuit courts. 
The commissioner of patents has no jurisdiction in 
said cases as well as he has no judicial authority to 
take action in disputed questions of title under an 
assignment. 



Part B 



CHAPTER I. 

The taking out and peculiarities of Foreign Patents; Interna- 
tional Convention for the protection of industrial property. 

No other leading country is equally favorable to 
inventors as the United States^ where the life of the 
patent, with a few exceptions,^ is the longest and the 
fees are the smallest; there are no taxes, no obliga- 
tion to manufacture, and the territory, second only 
to Russia in size, offers, though comparatively 
sparsely peopled, better facilities for selling a patent 
than any other country in the world. So if a patent 
does not prove valuable or is not likely to advance 
in public favor in the United States there is little 
chance to make it worth getting it patented any- 
where else. 

No less than about seventy-five of the countries 
of the world have recognized the importance of en- 
couraging the industrial progress by adopting patent 
laws, but the form under which protection is ob- 
tained under them is very different both in principle 
and practice. 

Some countries as Great Britain, France and 
others^ grant patents without preliminary examina- 
tion* into the novelty, so that the grant of letters 
patent in these states is no proof that the invention 



iThe number of patents issued far exceeds other States. 

'The term is longer in Canada, Mexico, Belgium and Spain. 

^Germany (Gebrauchsmuster), Italy, Belgium, Spain, Portugal, 
Switzerland, Mexico, Brazil, Tunis.% 

^Preliminary examination has been adopted in the United States, 
Canada, Germany, Austria, Russia, Denmark, Sweden, Norway, Japan, 
Argentine Republic, Chili, Hawaii, Liberia. 



44 

has not been previously patented, or otherwise be- 
come public property. It is easy to get patents there 
but they are worthless if afterwards it should be 
proved that the invention was not new, or that the 
claims are too broad^ and not clear, or that the pre- 
scribed formalities were not observed, or finally that 
the invention was not patentable at all under the 
laws of the particular country. 

An invention is not considered new when, at the 
time of making the application, the discovery is al- 
ready known and used by other persons, or de- 
scribed in printed publications in any country; even 
the publication of patents in the Official Gazette of 
the Patent Office, the book may have reached the 
foreign country or not, can in some cases be suf- 
ficient to invalidate the grant of a patent. In some 
countries the applicant loses the filing fee when the 
patent according to the provisions of the law cannot 
be granted. 

Many States^ grant patents to anyone who is the 
first applicant, irrespective if he is the inventor or 
not, but it is advisable to keep the inventor's con- 
sent as a proof that the person was duly authorized 
to apply for the patent, as otherwise the patent might 
be invalid. Some patent laws^ transfer the letters 
patent to the true inventor when the patent for his 
invention was already granted to another; in India 
and Ceylon the unlawful patentee must pay over to 
the actual inventor the profits derived from the in- 
vention. 



iWhen something already patented is claimed. 

^So Germany, France, Belgium, Portugal. 

*Great Britain, Austria, Finland, Japan, Australia, etc. 



45 

In most of the foreign countries annual taxes^ are 
to be paid, the first tax generally being due at time 
of application, and should the payments be not 
promptly made the patent will lapse; a few States 
allow a short period of grace on the payment. 

Working i. e., the commercial production of the 
invention, is usually required; sometimes it is only 
nominal to comply with the law and certificates of 
working are then easily obtained. In some coun- 
tries^ the patentee can be bound to grant permission 
to use if the reasonable requirements of the public 
in reference to the invention have not been satisfied 
by reason of the patentee's refusal to manufacture 
or to license the patent. 

Some laws of foreign countries^ require non-resi- 
dents to place themselves within the jurisdiction of 
the laws by appointing a person within the State 
with power to represent the patentee in all legal mat- 
ters concerning the patent; in other States* an ad- 
dress within the national limits must be designated 
where notice of any kind can be given ; in Russia 
and Turkey the application must be presented 
through an agent domiciled within the State. 

Certain classes of inventions as articles of food 
or medicine or a composition produced by chemical 
process are excluded in the States named in the foot 
note.^ 

iMalta takes 5 per cent, of the profits arising from the invention. 

''Compulsory licenses are in Great Britain, Germany, Austria, Hun- 
gary, Denmark, Norway, Finland, Japan, India, Commonwealth of Aus- 
tralia, Luxemburg, Peru, Malta, Transvaal, South African Republic. 

'Germany, Austria, Hungary, Denmark, Finland, Sweden, Norway, 
Switzerland, Brazil, Japan, India, Ceylon. 

^Canada, India, Ceylon, Transvaal, Mysore, Negri Sembilan, Straits 
Settlements. 

"Germany, France, Austria, Hungary, Denmark, Sweden, Norv.'ay, 
Russia, Finland, Luxemburg, Switzerland, Italy, Spain, Portugal, Tur- 
key, Japan, Venezuela, Peru, Uruguay, Argentine Republic, Tunis. 



46 

Patents of addition i. e., a patent for improve- 
ments on an original invention can be obtained in 
the countries named below.^ The expense for ad- 
ditional patents is generally a small filing fee and a 
single tax. 

In nearly all the different patent laws of the world 
provisions are made for the transfer of patent rights ; 
cases of infringements are also taken into considera- 
tion. 

In order to bring about a certain conformity in 
regard to patents an International Union has been 
established, and though the commercial and indus- 
trial relations as well as the legislation of the par- 
ties widely differ, the treaty arrangements are now 
■almost in full force and effect. 

The International Convention^ for the protection 
of industrial property has its office at Berne, 
Switzerland, and its members are: United States, 
Great Britain with New Zealand and the Common- 
wealth of, Australia, Germany, Austria, Hungary, 
France with Tunis, Algeria and the French 
Colonies, Italy, Swiss Confederation, Denmark, 
Sweden, Norway, Belgium, Netherlands with Dutch 
East and West Indies, Spain, Portugal, Turkey, 
Servia, Mexico, Cuba, Guatemala, Salvador, 
Dominican Republic, Brazil, Chili, Ecuador. 

The salient points of the Convention are : 

Anyone who shall have regularly deposited an 
application for a patent of invention in one of the 



^New Foundland, Brazil, Argentine Republic, Uruguay, Jamaica, 
Japan, Congo Free State, Germany, France, Austria, Hungary, Italy, 
Spain, Portugal, Belgium, Switzerland, Denmark, Sweden, Norway, 
Luxemburg, Turkey. 

^The official language of the "Convention pour la protection de la 
propriete industrielle" is French. 



4t 

contracting States shall enjoy for the purpose of 
making the deposit in the other States, and under 
reserve of the rights of third parties, a right of 
priority during a period of twelve months. 

In consequence, the deposit subsequently made in 
one of the other States of the Union before the ex- 
piration of said period cannot be invalidated by acts 
performed in the interval, especially by another de- 
posit, by the publication of the invention or its work- 
ing, by the sale of copies of the design or model. 

Patents applied for in the different contracting 
States shall be independent^ of the patents obtained 
for the same invention in the other States, adherents 
or non-adherents to the Union. 

In the States whose legislation does not admit of 
seizure on importation, such seizure may be replaced 
by prohibition of importation.^ 

The patentee, in each country, shall not suffer 
forfeiture because of non-working until after a 
minimum period of three years, to date from the 
deposit of the application in the country concerned, 
and in the case where the patentee does not justify 
the reasons of his inaction. 

Finally, it shall be given temporary protection to 
patentable inventions which are shown at officially 
recognized international exhibitions. 

In making applications under the aforesaid treaty 
regulations of the International Convention a certi- 
fied copy of the foreign documents and an author- 
ized translation is required; besides this the special 

'In countries which are not members of the International Union 
patents do not exceed the unexpired time limit of the original foreign 
patent. 

^Importation is usually permitted in the United States, Great Britain 
3nd Colonies except Canada, in France, Germany, Austria-Hungary, Bel- 
gium, India, Paraguay. 



4^ 

administrative forms of the particular country in re- 
gard to the petition, specification and drawings must 
be observed. AppHcation must be made in the name 
of the same person, or a certified assignment is re- 
quired. 

If an inventor has secured a patent in England 
the preparation of the application in the various 
English colonies will be comparatively simple as 
their rules of practice are similar ; the petition under 
certain declarations and formalities must be filed 
in the Office of the Colonial Secretary or Commis- 
sioner and be accompanied by a specification iden- 
tical as far as practicable with the one filed on peti- 
tion for letters patent in England. 

Some foreign patent laws. allow to draw up the 
papers in one language or the other, so, for instance, 
Italy in Italian or French, Portugal in Portuguese 
or French, Switzerland in French, German or 
Italian, Belgium in French, German or Flemish; in 
some countries the form of the drawings are the 
same, so in Hungary, Sweden and Norway same 
as in Germany. 

In a number of countries without patent laws pro- 
tection for inventions may be obtained by special 
grant and the specifications will be registered, so in 
the Philippines, Porto Rico, China, Egypt, Domin- 
ican Republic, but doubt is expressed if such pro- 
tection is as reliable as a general patent law. 

It is remarkable that neither Holland nor Greece 
have any law which protects inventions though 
there are trademark laws. 



CHAPTER II. 

Compendium of foreign patent laws. 

AMERICA.* 

Canada. — Patents are granted to the inventor or 
his assignee for a term of six, twelve or eighteen 
years, but it is at the option of the appHcant to pay 
the three partial fees, and the patent shall cease at 
the end of the term for which such fee has been 
paid. The patent expires with the first expiring 
foreign patent. A fee of $20.00 is to be paid upon 
application, $20.00 before the end of the sixth year 
and further $20.00 before the expiration of the 
twelfth year. 

In order to provisionally protect a patent from 
being manufactured by some one in the Dominion, 
the law provides to give "notice of intention to ap- 
ply for a patent" within three months to the Com- 
missioner of Patents, and no other person, having 
commenced to manufacture the same device during 
one year from the date of the issue of the foreign 
patent, shall then be entitled to continue the manu- 
facture after the inventor has obtained a patent 
therefor. The fee for such caveat is $5.00. 

A patent becomes void at the end of two years 
if the manufacture of the invention is not com- 
menced within that period. The working must be 
continuously carried on, in such manner that any 
person desiring to use it can obtain it at a reason- 
able price. 

Canada is not yet a party to the International 
Convention for the protection of industrial prop- 



50 

erty, but applications can be filed within one year 
after the date of a foreign patent and the patented 
article can be imported during the first year of the 
life of the patent; after that time the patent will be 
rendered invalid as to the interest of the person im- 
porting the patented manufactures. 

Mexico. — Term is twenty years which can be ex- 
tended for five years longer. The tax has recently 
been greatly reduced and is very low now ; $5.00 for 
the first year and $35.00 for the remaining period. 
The examination is purely administrative, and will 
on no account turn upon the novelty or utility nor 
upon the clearness of the specification and patents 
are granted without prejudice to third parties. 

Exploitation is not obligatory; but if after the 
expiration of three years the patent is not worked 
industrially within the national territory, or if after 
said time the working is suspended for more than 
three months, the Patent Office can grant a license 
to another party, in which case one-half of the net 
earnings obtained by such licensee will go to the 
patentee. The license can be revoked. 

The Patent Office will at the request of an inter- 
ested party, make, with respect to the novelty of a 
patent asked for, an examination without guaranty. 
The examination will also be made at the request 
of any one for the purpose of ascertaining whether 
an article is patented in Mexico or is public prop- 
erty. 

Cuba. — Term, seventeen years. No taxes. Fee 
of $35.00 is to be paid after acceptance of the ap- 
plication which is to be directed to the Department 



61 

of Agriculture, Industry and Commerce. In case a 
foreign patent exists, a certified copy of its registra- 
tion with the signature of the Commissioner of 
patents is required. Documents must be accom- 
panied by a Spanish translation. Invention must 
be commercially produced within one year. 

Colombia. — Term, from five to twenty years. 
Patent expires with a foreign patent. With the ap- 
plication a deposit of $4.00 must be made at the 
General Treasury which amount is forfeited if the 
patent is not granted. Annual taxes of from $2.00 
to $4.00. Foreign patents can be protected pro- 
vided the discovery has not become public property. 

Venezuela. — Term, five, ten or fifteen years and 
patents are forfeited in six months, one, or two years 
if during that time the discovery is not put into 
practice. Tax is $16.00 per annum. With the ap- 
plication the tax for one-half the number of years 
for which the patent is applied for is payable. 
Should no patent be issued the applicant loses the 
amount paid in. Foreign letters patent are not an 
obstacle provided the invention has not been pub- 
lished; such patent will lapse with the expiration of 
the foreign patent. 

Brazil. — Term, fifteen years. Besides expenses 
and fees incurred, the patentee must pay annual 
taxes of $20.00 in the first year, increasing each 
year by $10.00. Patent of improvement is subject 
to a single tax. Applicant must be the inventor and 
the discovery must not have been publicly known. 
No previous examination except in case of food 
products. Effective use is required within three 
years. 



52 

Argentine Republic. — Term, five, ten or fifteen 
years. Tax $80.00, $200.00 or $350.00. A foreign 
patent is limited to ten years and expires with the 
original patent. Payment to be made one-half at 
time of application, remainder by successive yearly 
rates. Certificates of addition are issued at a cost 
of one-fourth part, also precautional patents upon 
payment of $50.00. Invention must not have been 
public within the Republic. Applicant can be in- 
ventor or his assignee. 



*Patent laws are further in New Foundland, Guatemala, British 
Honduras, Costa Rica, British Guiana, Chili, Paraguay, Uruguay, Bolivia, 
Peru, Ecuador, Bahama Islands, Barbadoes, Jamaica, Leeward Islands, 
Trinidad and Tobago. 



EUROPE.* 



Great Britain. — Term, fourteen years. Patent 
covers England, Ireland, Scotland, Wales, the 
Channel Islands and Isle of Man, but does not af- 
ford protection in the colonies as they have laws of 
their own. 

On filing the complete specification a fee of 
$30.00 is payable; it is further required a tax of 
$25.00 for the fifth year, $30.00 for the sixth year 
and so on, increasing $5.00 each year so that the 
whole amount of taxes is $495.00. 

There is a mode of procedure, the provisional 
patent, whereby an invention is protected for nine 
months at a cost of $5.00, the subsequent completion 
being optional. An article only provisionally pro- 



53 

tected is not "patented" and cannot be marked so, 
nor can an action be taken for infringement. 

The inventor or an importer can apply for a 
patent to the Patent Office. The application is sub- 
jected to an official examination with the object of 
ascertaining whether the specification is properly 
made up. Should it after the issue of the patent be 
shown that the invention was already patented or 
has previously been made public by books, the patent 
IS invalid. When the patent was issued to a person 
not entitled to the privilege, it can be transferred to 
the true inventor. 

If the patent is not worked or the reasonable re- 
quirements of the public with respect to the inven- 
tion cannot be supplied or any person is prevented 
from working or using, the Board may order the 
patentee to grant licenses on terms as may deem 
just. 

Germany and Colonies. — Term, fifteen years. 
With the application a fee of $5.00 must be paid 
for the cost of proceeding. Before the patent is 
issued, a fee of $7.50 is due, then in the second year 
an annual tax of $12.50, which tax is increasing 
each year by $12.50, aggregating to a total sum of 
$1,320.00 during the life of the patent. Patents of 
addition expire with the original patent. 

There is, besides the other one, an unusual kind 
of patents, the "Gebrauchmuster," model of utility, 
a design patent, which embraces small inventions 
such as tools, toys, models of implements, etc. Term 
is three years; fee of $3.75 to be paid on application. 
Term can be prolonged for a further period of three 
years on payment of $15.00. 



54 

Anyone can apply for a patent of a new inven- 
tion to the Patent Office, and a representative must 
be appointed with power to act in all proceedings. 

Invention must be worked within three years pro- 
vided a demand springs up but may be imported. 
Patents can be revoked after a period of three years, 
if it appears to be in the interest of the community 
that licenses to others should be granted, but the 
patentee declines to do so though reasonable com- 
pensation and adequate security was offered to him. 

France and Colonies.^ — Patents are granted for a 
term of five, ten or fifteen years. Annual taxes of 
$20.00 are levied, amounting to a total of $300.00 
for fifteen years, and they must be paid before an 
assignment can be registered. A patent of addition 
for improvements can be obtained on payment of 
$4.00, and it expires with the original patent; no 
further taxes are to be paid. 

Anyone can apply for a patent by making a peti- 
tion to the Minister of Agriculture and Commerce. 
Invention must not have been published in print, 
but a previous foreign patent is not a bar to a valid 
patent. No preliminary examination takes place 
and patents which afterwards shall prove to be not 
new are null and of no effect. 

Working is required within three years but im- 
portation is permitted. 

A patentee who omits to add to the marking the 
words "without guarantee of the government" is 
subject to a fine. Marking is not allowed after the 
expiration of the term for the patent. 

^Corsica, Algeria, Tunis, Senegambia, Guinea, Madagascar, Reunion, 
Cochin-China, Cambodia, Anam, Tonquin, New Caledonia, Martinique, 
Guadeloupe, French Guiana. 



55 

Articles said to be infringed can be seized on 
request of the patentee who, however, must furnish 
a security; he also is obliged to sue, either by civil 
or criminal proceedings, within eight days. 

Austria. — Term, fifteen years. Fee of $4.00 pay- 
able on filing; taxes commence at the rate of $8.00 
for the first year, and increase gradually until the 
tax in the fifteenth year is $136.00, which makes an 
aggregate of about $800.00. There are also patents 
of addition at a cost of $14.00. 

The originator of an invention can make applica- 
tion by addressing the patent office. Invention must 
not have been published or become known otherwise. 
Applicant must appoint a representative within the 
Empire, and delivery to him shall have the same 
legal effect as if it had been to the owner himself. 

Working is required within three years, but no 
objection to the patented article being imported. 
Compulsory license if the invention is not worked 
to a suitable extent, or the patent can be withdrawn. 
Should a patent already be issued to a person who 
was not entitled to it, the letters patent can be trans- 
ferred to the true inventor. 

Hungary. — Term, fifteen years. Fee of $4.00 on 
application to the patent oiffice, then annual taxes, 
commencing with $8.00 and gradually increasing 
until the tax amounts to $101.50 for the last year. 
The aggregate sum is $572.00. Patents of addition 
may be obtained upon payment of $12.00. Appli- 
cant must declare that he is the inventor or holder 
of an interest and must be represented in the King- 
dom. 

iLofC 



56 

Discovery must be worked within three years 
after the grant of the patent. Compulsory license 
can be granted when the reasonable requirements 
have not been satisfied. 

Russia. — Patent is granted for fifteen years and 
is subject to annual and increasing taxes, commenc- 
ing with $7.75 in the first and ending with $206.00 
in the last year, amounting to a total of $1,097.00 ; 
the application fee is $15.50. The patent of addi- 
tion costs $15.50. 

The inventor or his assignee can make the appli- 
cation by petition to the Committee of Technical 
Affairs of the Department of Commerce and Manu- 
factures. The inventor, on making application, 
must be represented by an agent domiciled within 
the Empire. A valid patent can be obtained after 
the grant of a foreign patent. In case of the refusal 
of the application the money paid in will be repaid. 

Invention must be worked within five years of the 
date of the patent. 

Denmark. — Term, fifteen years. On application 
a fee of $5.50 is to be paid; annual taxes increasing 
in periods of three years begin with $6.75 and end 
with $80.50, amounting to a total of $543.00. 
Patents of addition may be obtained for improve- 
ments on the original patented invention ; they expire 
with the latter. Preliminary examination as to 
formalities and patentability. 

The owner of the discovery or his representative 
may make the application to the Patent Commis- 
sion. Invention must not have been made public 
through publication. An attorney residing in the 



57 

Kingdom is to represent the patentee in all matters 
concerning the patent. 

Working must take place within three years. The 
patentee can be bound to grant permission to use in 
case the invention is not worked to an adequate 
extent. 

Sweden. — Term, jfifteen years. $5.50 is due on 
filing the application; then annual taxes, from the 
second to the fifth year $6.75 each, from the sixth 
to the tenth $13.50 each, and then $20.00 annually, 
amounting to a total of $210.00 for the life of the 
patent. Patents of addition as in Denmark. 

Application can be made by the true inventor or 
his representative to the Bureau of Patent and Reg- 
istry. A legal representative within the Kingdom is 
required. No valid patent can be had, if discovery 
has been published in print. Preliminary examina- 
tion as to patentability. 

If the King considers it necessary that a patented 
invention shall be open to the free use of the public, 
the patent is no obstacle, but the inventor is entitled 
to full compensation. 

Norway. — Term, fifteen years. The filing fee of 
$8.00 includes first annuity. Annual taxes commence 
with $2.70 in the second year and increase each 
year by $1.35 aggregating' to a total of $168.00. 
Patents of addition and application as in Denmark. 

Publication in print does not prevent the grant 
if within six months is applied for. 

A representative within the Kingdom must be ap- 
pointed. Invention must be worked within three 
years but a prolongation up to four years will be 



58 

allowed on request. Patent is forfeited if the owner 
fails to comply with the conditions. 

A patented invention which is of essential value 
to any particular trade or industry may, by royal 
decision, be appropriated to private use but full com- 
pensation is given. 



im and Colonies. — Term, twenty years. 
Annual tax of about $2.00 for the first year and in- 
creasing annually by same amount which makes 
$405.00 for the twenty years. Patents of improve- 
ment may be obtained terminating with the original 
patent; no taxes. 

The first applicant can get the patent by applying 
to the Minister of the Interior. A foreign patent is 
not a bar. No previous examination. 

Working is required within three years; the im- 
portation of the article or the granting of a license 
is deemed sufficient as working. 

Italy. — Patents are granted for a term of from 
one to fifteen years ; they can be prolonged to the full 
duration and also patents of improvement are issued. 
Small annual taxes increasing every third year 
amounting to a total of about $260.00. Application 
is to be addressed to the Minister of Agriculture, 
Industry and Commerce ; there is no preliminary ex- 
amination as to novelty. Working is due within 
three years. 

Spain and Adjacent Islands. — Term, twenty 
years. Annual tax beginning with $2.00 for the 
first year and increasing annually by same amount 
making an aggregate sum of $410.00 for the 
patent's life. Patents of addition can be obtained 



at an expense of $5.00 and expire with the original 
patent. An importer of an invention, which is the 
subject of a prior foreign patent, can obtain only a 
five or ten-year patent, and he must apply for same 
within two years. 

Application is to be made by the owner to the 
Minister of Commerce. There is no previous exam- 
ination and at the head of the letters patent is 
printed : "Patent of invention without guarantee of 
the Government as to novelty, fitness, or utility." 
Working is required within three years. 

Portugal and Colonies. — Patents are granted to 
the first applicant for one, five, ten or fifteen years; 
prolongation for the full term may be obtained be- 
fore the expiration of the term previously applied 
for. During the existence of the principal patent, 
improvements and modifications may be added 
which enjoy the privilege of a patent right. Appli- 
cations are to be addressed to the Division of In- 
dustry, at the Ministry of Public Works, Commerce 
and Industry. 

The taxes are $3.25 per annum; with the applica- 
tion the tax for one year is due. An invention is 
not considered to be new if it has been described in 
any publication, or has been in public use. 

Working is required within three years. 

Switzerland. — Term, fifteen years. Application 
fee is $4.00 ; annual and progressive tax of $4.00 in 
the first year and increasing each year by $3.00, 
amounting to a total of $260.00. Additional patents 
may be obtained on payment of above filing fee. 

Applications for patents can only be made by the 
true inventor, his assignee or representative and 



60 

must be addressed to the Bureau of Intellectual 
Property. Applicant must nominate an attorney 
domiciled in the State. The patent shall be forfeited 
if the patented article is imported from abroad, or 
if the invention is not worked within three years, 
or if the patentee refuses applications offered on 
equitable terms for licenses. 

Patented articles must be marked with the Federal 
Cross and the number of the patent. 

Turkey in Europe and Asia. — Patent is granted 
for five, ten or fifteen years and is subject to the 
payment of a tax of $45.00, $90.00 or $135.00 re- 
spectively. This tax is payable by annuities of $9.00 
at the commencement of each year. 

Patentee, on making application, must be repre- 
sented by an agent domiciled within the Empire. 
Applications are to be directed to the Ministry of 
Commerce and Agriculture. 

No invention will be considered new which, be- 
fore the application, was made publicly known so 
that it could be worked. 

Invention must be put into practice within three 
years. The law as to marking is similar as in 
France; patentee must add to the mark "without 
guarantee of the government," and "he is not entitled 
to mark after expiration of patent. 

'Further European patent laws are in Finland, Luxemburg, Herze- 
govina, Bosnia, Gibraltar^ Malta. 



ei 



ASIA.* 

British India. — Term, fourteen years. Applica- 
tion fee $13.00 ; before the expiration of the fourth 
year a tax of $15.00 is due and the same amount 
after the fifth, sixth and seventh year ; in the follow- 
ing years $30.00 annually. Application can be 
made within one year after the date of the foreign 
patent. Invention must be properly worked or com- 
pulsory licenses can be granted, 

Japan. — Term, ten or fifteen years. Fee $5.00 
or $10.00, which is returned if application is de- 
nied. Preliminary examination. Applicant must 
appoint a person domiciled in the Empire to be his 
agent. Patents which become known through 
printed publications are generally refused. Patent 
can be revoked or compulsory licenses be granted 
when the owner without reasonable cause has failed 
to work and publish his invention within three years. 

*There are also special patent laws in Ceylon, Straits Settlements, 
Perak, Selangor, Negri Sembilan, Mysore, British North Borneo, Hong 
Kong, French Indo-China, 



AFRICA.* 



Cape Colony. — Term, fourteen years. Fees : On 
depositing specification $13.50, on obtaining letters 
patent same amount, at or before the expiration of 
the third year $50.00, at or before the end of the 
seventh year $100.00. True inventor or his assignee 



612 

may apply. Extension of term is granted if the 
patentee was unable to obtain a due remuneration 
for his expenses and labor. 

*Patent laws are further in Natal, Transvaal, Orange Free State, 
South African Republic (Rhodesia, etc.), Congo Free State, Liberia, 
Tunis, Algeria, St. Helena, Mauritius. 



AUSTRALIA.* 



Commonwealth of Australia. — The patent is 
granted for a term of fourteen years and gives pro- 
tection in Western and South Australia, Victoria, 
New South Wales, Queensland and Isle of Tas- 
mania. There is a small fee payable on filing and 
another fee due before the expiration of the first 
moiety of the patent's life. Discovery must be com- 
mercialy produced within two years or compulsory 
license can be granted. Applicant can be the owner 
of the patent or his representative. 

'Further countries with patent laws are: New Zealand, British 
Guinea, Fiji Islands, Hawaii. 



